Money Credit quality of Canadian banks under strain: Moody's

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Investors are safe to invest in the nation's top lenders, including Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM), despite warnings about the rising consumer debt level.0000

(Reuters) - Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ’ s Investor Service said in a report released on Tuesday.

(Reuters) - Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ’ s Investor Service said in a report released on Tuesday.

Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks, Moody's Investor Service said in a report released on Tuesday.

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(Reuters) - Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ’ s Investor Service said in a report released on Tuesday.

Credit cards are displayed in Montreal on Dec. 12, 2012. Ryan Remiorz/THE CANADIAN PRESS. Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ' s Investor

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"Almost half of outstanding mortgages will have an interest rate reset within the year, which will increase the strain on households' debt-servicing capacity," analyst Jason Mercer wrote in a report.

The Canadian economy added 15,400 jobs in February. On a year-over-year basis, employment rose by 282,500, or 1.5 percent, according to data from Statistics Canada.

The Bank of Canada has hiked rates three times http://reut.rs/2IjMYc2 since last July. The next rate hike is expected to come after July.

The proportion of uninsured mortgages, including lines of credit for home equity, has risen to 60 percent this year from 50 percent five years ago, the credit ratings agency said.

Mumbai, June 25 Moody ’ s Investors Service has warned that Indian banking system’s asset quality could come under strain , with higher levels of non-performing loans, as a reversal of the favourable credit cycle that has underpinned robust Indian loan growth over the past few years has gradually

Canadian banks are seeing the creditworthiness of their customers besieged by external forces, according to Moody ’ s Investors Service. “The strong credit quality of Canadian consumer loans, thanks largely to record low unemployment in recent years

An average Canadian household owed a near-record C$1.67 ($1.35) for every dollar of disposable income in the first quarter last year, mainly because of mortgage debt. (http://reut.rs/2DlhUVv)

Insured mortgages in Canada have been on the decline due to the country's decision to restrict supply and increase premiums.

Moody's added that as debt-to-income levels rise, the banks will feel the impact on its unsecured credit card portfolios first and hurt the asset quality.

Credit card loans require no supporting collateral and have a lower repayment priority for financially strapped borrowers, making the losses on such loans more severe compared to losses on consumer lending, Moody's said.

Moody's said longer auto loans flag a growing risk as vehicle values fall faster than the loan is repaid.

"This shortfall is often rolled into the initial balance of a new car loan, compounding the negative equity and credit risk," Moody's said.

More than 2 million vehicles http://reut.rs/2Fy9D6y were sold last year in Canada, the highest ever in a year, and vehicles sales continue to be on the rise so far this year compared with a year earlier.

(Reporting by Anirban Paul and Ahmed Farhatha in Bengaluru)

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(Reuters) - Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ’ s Investor Service said in a report released on Tuesday.

(Reuters) - Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ’ s Investor Service said in a report released on Tuesday.

(Reuters) - Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ’ s Investor Service said in a report released on Tuesday.

Credit cards are displayed in Montreal on Dec. 12, 2012. Ryan Remiorz/THE CANADIAN PRESS. Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ' s Investor

Mumbai, June 25 Moody ’ s Investors Service has warned that Indian banking system’s asset quality could come under strain , with higher levels of non-performing loans, as a reversal of the favourable credit cycle that has underpinned robust Indian loan growth over the past few years has gradually

Canadian banks are seeing the creditworthiness of their customers besieged by external forces, according to Moody ’ s Investors Service. “The strong credit quality of Canadian consumer loans, thanks largely to record low unemployment in recent years

Canadian banks are seeing the creditworthiness of their customers besieged by external forces, according to Moody ’ s Investors Service. “The strong credit quality of Canadian consumer loans, thanks largely to record low unemployment in recent years

(Reuters) — Rising interest rates along with strong job growth has led to more uninsured mortgages and longer tenure of car loans, putting a strain on the lending quality of Canadian banks , Moody ' s Investor Service said in a report released on Tuesday.

Canadian banks are seeing the creditworthiness of their customers besieged by external forces, according to Moody ’ s Investors Service. “The strong credit quality of Canadian consumer loans, thanks largely to record low unemployment in recent years

Following its bank downgrades, Moody ’ s affirmed the ratings on Canadian credit card asset-backed securities from Canadian Imperial Bank of Commerce, Royal Bank of Canada , and Bank of Nova Scotia. It placed Bank of Montreal’s Class B notes under review for a possible downgrade.